Sweepstakes businesses closed, for now

Friday

Jan 4, 2013 at 4:34 PM

Sweepstakes owners throughout Davidson County don't appear to be challenging a state law that bans the electronic gaming machines.

BY NASH DUNNThe Dispatch

Sweepstakes owners throughout Davidson County don't appear to be challenging a state law that bans the electronic gaming machines.At least 10 sweepstakes businesses were closed throughout Davidson County on Friday. Most had signs on the front doors, telling their customers the closures were due to compliance issues with a state law that prohibits electronic machines and devices for sweepstakes.The 52 Business Center, located at 1744 Old U.S. Highway 52 in Lexington, closed Wednesday at 11:30 p.m. A sign on the front door read, "Updating software to comply with North Carolina state law. Thanks for your patience. Expected time to reopen: 1-4 days."Last month, the state Supreme Court ruled in two cases in favor of a 2010 law banning sweepstakes machines as a form of gambling. It reversed a decision made by the Court of Appeals, which declared the statute an overbroad restriction on protected speech and struck it down as unconstitutional.The N.C. Attorney General's office advised local law enforcement agencies to wait until Jan. 3 to enforce the law, when the Supreme Court issued its mandate back to the Court of Appeals.With the law now in effect, many sweepstakes businesses across the state chose to close voluntarily. Many, including several in Lexington and parts of Davidson County, are in the process of installing new software that owners believe is in compliance."We're supposed to have software that is legal now," said Danny Dagenhart, a Lexington resident who owns two sweepstakes businesses in Davidson County. Dagenhart, who has been vocal about the economic and therapeutic advantages that sweepstakes businesses provide, said new, "pre-reveal" software was installed on most of his machines recently.Many sweepstakes businesses across North Carolina are changing over to the "pre-reveal" games, which give customers the option to "reveal" their prize without even playing a game.Many people compare sweepstakes to the Monopoly game at McDonald's, where customers who purchase a beverage or certain food can earn game pieces that could result in a prize.However, electronic sweepstakes games appear similar to card games and slot machines common to casinos, which can make enforcement difficult.Lawmakers tried for more than 10 years to eliminate video gambling and sweepstakes machines, arguing that they can't be regulated, are addictive to players who lose hard-earned money and lead to crime and family strife. Some opponents, however, have argued that regulated parlors can lead to a boost in the economy.Phil Giurintano, owner of the newly opened Double Play Sweepstakes in Lexington, said he closed his doors Wednesday night to comply with the law."When I opened this business, I decided that it was going to be fair, it was going to be honest, and it was going to be legal, or I wasn't going to be here," Giurintano said. "I'm not worried about the fact that the law has changed versus what it was. The law is the law."We're very fortunate to live in a free country. We have elected politicians to be the mouth of all the people, and if those politicians honestly and fairly think that this is not the business they want or they want to change things in that business, this store is going to comply with whatever the law of the land is." He said the police department and other law enforcement officials have been "spectacular" in working with him on this issue. Giurintano, a Vietnam veteran, invested $80,000 in his business, which opened October 2012 and is located at the site of the former Blockbuster Video store on Raleigh Road."I took a building that used to be closed for two years, and we cleaned it and turned it into something other than an eyesore," Giurintano said. "It became part of the community rather than an eyesore."Giurintano said VS2 Worldwide Communications, which produces the software for his business, has already upgraded Double Play's machines with the "pre-reveal" software.Double Play Sweepstakes retained the sixth and final permit for sweepstakes businesses in Lexington. Lexington City Council approved revised ordinances in 2012, which only permit six sweepstakes businesses within the city limits at one time.Lexington City Council also approved in 2012 a resolution that imposed annual fees of $1,000 per sweepstakes establishment, plus $500 per computer terminal inside. With a required minimum of 30 computer terminals in new businesses, and an average of more than 10 terminals in existing businesses, the fees would have raised a minimum of about $50,000 each year. While the state law took effect this week, it's still unclear exactly how local law enforcement agencies plan to enforce it.Davidson County sheriff's deputies issued warnings to several sweepstakes businesses located throughout the county. One was posted on the door of the Welcome Business Center, located off of Old U.S. Highway 52, just before 11 a.m. Friday.The warning advised business owners that the new law is subject to enforcement."We'll be enforcing the law as it's written," said Davidson County Sheriff David Grice.Officials with the Lexington and Thomasville police departments say they are in conversations with District Attorney Garry Frank to discuss how to best enforce the law."It's just like any other law," Frank said. "If you're in violation, you're subject to enforcement."That being said, Frank said he is confident there will be some reasonable effort to work with business owners since this issue has been so confusing over the years.Nash Dunn can be reached at 249-3981, ext. 227, or at nash.dunn@the-dispatch.com.

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